Energy crisis spreads to Karachi on gas supply diversion

Experts say LNG import the only short-term quick fix to curtail the crisis .

Saad Hasan May 27, 2013


For months Karachi remained immune to crippling power breakdowns, prompting politicians from other parts of the country to call for equal distribution of painful loadshedding. And so it has started in the port city where some areas remain without electricity for up to 10 hours.

The problem started couple of days back when the Sui Southern Gas Company (SSGC) had to divert just a small part of its supply to its sister company Sui Northern Pipelines (SNGPL), which serves Punjab and Khyber-Pakhtunkhwa.

As a consequence, gas supply to SSGC’s largest customer the Karachi Electric Supply Company (KESC) was cut by more than half. Without sufficient supply, the power utility was not able to run its power plants.

Operating power plants on furnace oil is out of the question, considering a backlog of over Rs42 billion, which the government has to pay KESC under subsidy passed on to consumers.

“Furnace oil is 3.8 times more expensive than gas,” said Ahmed Faraz, a KESC spokesperson. “In any case most of our plants can only run on gas now.”

KESC has an installed power generation capacity of around 2,300 megawatts (MW). Out of this, 1,010MW had been added to the system over the past five years and all of it is configured to use gas, according to Faraz.

Four of its units running on oil consume between 2,500-3,000 tons of furnace oil every day. With price hovering around Rs62,000 per ton, the daily fuel cost exceeds Rs155 million.

“It is a very expensive proposition. When we invested in the power plants, the government assured us that it will provide 130 million cubic feet of gas per day (mmcfd),” said Faraz.

Pakistan’s total gas production has remained flat at 4,000mmcfd, whereas the demand has surged beyond 6,000mmcfd. From factories to domestic consumers, everyone has felt the impact of shortages in the past few years.

SSGC had to divert 90mmcfd from its system to the SNGPL after a major gas field Qadirpur was shut for annual maintenance.

Secretary Petroleum Abid Saeed played down the issue saying such adjustments were routine. “There has been a shortage of 150mmcfd because of work being carried out at Qadirpur. I personally feel there has been some sort of miscommunication between all the companies. The situation will be back to normal in a day or two.”

Despite incentives offered by the government, the petroleum exploration and production companies have not been able to shore up output mainly because most prospective parts in Balochistan remain under siege of militancy.

Naeem Sharafat, who headed Pakistan’s first liquefied natural gas (LNG) project, warns that energy crisis will only deepen if the new government took a half-hearted approach to accepting bitter facts.

“We have been working since 2006 for LNG imports to start. There use to be just one proposed project and now there are five. No one knows what’s happening,” he said.

Mashal LNG initiated by SSGC was supposed to come online last year. Actual work on the terminal and allied facilities never started.

“Because of some wrong decisions, we have made a mockery of ourselves internationally. Every time there is a proposal to start imports, some group jumps in to have cut, spoiling the entire process,” said Sharafat, who worked on details of Mashal for six years.

Yet the fact that Pakistan is primarily a gas-based economy and has one of the finest pipeline infrastructure offers opportunity to international suppliers, he said.

“LNG import is the quickest solution we have to solve part of the energy supply issue. Imported gas will be expensive than domestic supply but 15% to 20% cheaper than furnace oil. We could use it to run our power plants,” he said.

Published in The Express Tribune, May 28th, 2013.

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imran | 8 years ago | Reply

P is Punjab in Pakistan, I think its easy to learn

Fair play | 8 years ago | Reply

No body is willing to look into the fact that the 18th amendment gives a province first right of use on the natural resource which it has produced. Sindh produces 70% of the total gas produced in Pakistan, yet gets to use only 35% of it. On the other hand, Punjab produces 6%, yes only 6% of the total natural gas, yet uses a whopping 45% of it. It may also be noted that Mr. Shahbaz Shareef himself was a signatory to the 18th amendment on behalf of Govt. of Punjab couple of years ago. So going by this mutual agreement between all provinces, KESC should get gas to run its plants to provide gas locally and this is the reason that Karachi has been getting electricity. There is also a misconception in the Country (read Punjab) that Karachi is not getting its share of loadshedding. Contrary to that, there has been 6-10 hour of loadshedding in Karachi over last two years. However due to KESC's policy of giving maximum electricity to those areas where it has maximum recovery of dues has resulted in some areas getting completely exempted from loadshedding. On the other hand, areas where there is lot of pilferage, KESC penalizes them with loadshedding. It is a simple yet smart solution which WAPDA can also adopt instead of blaming others.

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